Volvo Trucks Profit Leaps as Company Cuts Jobs

STOCKHOLM -- Heavy truck and construction equipment maker Volvo (IW 1000/96) posted soaring profits for the first quarter on Friday as the company implements a restructuring plan including 4,400 job cuts.

Net profits tripled compared to the figure a year earlier to 1.08 billion kronor (US$165 million), close to the 1.16-billion-kronor expectation by analysts polled by Dow Jones Newswires.

"The measures that are being implemented to increase the Group's profitability are running according to plan and are starting to have a positive impact on the gross margin and costs," chief executive Olof Persson said.

"But there is still more work to do in terms of cost reductions and this is the Group's main focus for 2014."

The group announced 2,000 job cuts in October and another 2,400 in February, hoping to boost profitability.

So far, 900 white-collar employees and consultants have been laid off.

In December 2013, the group had 95,500 staff and 15,000 consultants worldwide.

Volvo said it had launched a voluntary leave program in Sweden and that similar measures would be applied in other countries during 2014.

According to the group, sales in the first quarter improved in North America, Western Europe and Japan, while "the emerging economies in South America and Asia saw weaker demand."